Posted
by
timothy
on Saturday August 02, 2014 @08:26AM
from the it-does-seem-a-bit-overreachy dept.

jfruh writes The FTC has moved aggressively recently against companies that make it too easy for people — especially kids — to rack up huge charges on purchases within apps. But at a dicussion panel sponsored by free-market think tank TechFreedom, critics pushed back. Joshua Wright, an FTC commissioner who dissented in a recent settlement with Apple, says a 15-minute open purchase window produced "obvious and intuitive consumer benefits" and that the FTC "simply substituted its own judgment for a private firm's decision as to how to design a product to satisfy as many users as possible."

Very true. A wholly free market is actually quite toxic, as a certain Adam Smith noted. Especially when it's dishonest.

In-app purchases are the return of micropayments, but for virtual goods less valuable than Second Life real estate. It is, of course, entirely fair for companies to sell such products and for customers to buy them, but the control system is poor, virtual goods have an amazingly high failure rate for delivery, and prices are often in the small print.

the FTC "simply substituted its own judgment for a private firm's decision as to how to design a product to satisfy as many users as possible."

Because that is what we pay them to do. And there is a very good reason; because private firms measure customer satisfaction through the lens of maximization of profit (fairly short run profit in the case of apps), and the FTC measures it through imperfect objective analysis of the rational self-interest and informedness of the transaction participants. Gee, here's a surprise: Those two measures don't always agree, and sometimes, when they are far enough out of whack, it actually increases GDP in the long run if you limit the freedom of people to engage in inefficienty transactions.

A really good example of such potentially inefficient transactions is children, who do not understand how much time and effort it costs to acquire money, are in the throes of video game passion and a screen pops up saying, "Win More, Only $3.99! Buy Now!"

Joshua Wright, an FTC commissioner who dissented...

A market filled with efficient transactions increases GDP in the long run relative to a market with less efficient transactions. So, tell me, Joshua Wright; do you hate the economy? Do you want a lower GDP? Do you want our corporations to lose money? Do want our wealthiest stockholders to have to buy slightly smaller Gulfstreams? Answer me, Mr. Wright: Do you hate America?

A really good example of such potentially inefficient transactions is children, who do not understand how much time and effort it costs to acquire money, are in the throes of video game passion and a screen pops up saying, "Win More, Only $3.99! Buy Now!"

If they can do that, those children have much larger issues than a $4 charge - they have stupid and irresponsible parents, who are not only providing inadequate supervision, but are incompetent at teaching their children life skills.

If they can do that, those children have much larger issues than a $4 charge - they have stupid and irresponsible parents, who are not only providing inadequate supervision, but are incompetent at teaching their children life skills.

Your observation, whether true or not, does not make the transactions efficient. Inefficient transactions are bad for the economy, regardless of their cause. Do you want American companies to lose money? Do you hate America?

I really liked my last snarky response, but I just thought of another one:

Those in-app purchases require an account password - that's a parental responsibility. Allowing the kids to know the password is no different than sending them to the toy store with a blank check. Not only are the parents not teaching their children to take responsibility for their actions, the parents themselves aren't being responsible.

I've long been thinking the same thing about crosswalk signals. Children whose parents fail to tea

If we don't allow natural car-versus-pedestrian fatalities to punish stupid parents by killing their children, how will they ever learn?

The problem is that the child will dent the car that hit him, causing the driver problems. Even if the driver manage to prove that the child ran out unexpectedly (lets say they have a dashcam video that shows this), there is still going to be a trial costing the driver money and the money needed to straighten out the car. Not to mention the stress and psychological issues for the driver.

Perhaps you haven't educated yourself sufficiently on the issue at hand. The problem was that parents would enter their password to allow a single purchase and then hand the device to a child, unaware that the password would be cached for the next X minutes. They expected that the child not knowing the password would secure them from unauthorized in-app purchases. That is a reasonable expectation, one would think.

Alas, businesses wanted to make impulse buys as easy as possible and so violated that reasonab

The 15 minute behavior [archive.org] has been documented for over 3 years. Additionally, every purchase requires confirmation. As I said, this is a parental failure. If you can't raise kids who can be trusted with a blank check, simply don't give them one. If you don't understand how the purchasing system works, don't use it, and certainly don't authorize your kid to do so.

Which doesn't mean that you can expect any non-geek to know it. Heck I'm a geek, and I've owned iOS devices since 2008 and if I ever knew about a 15 minute window I've forgotten.

And the attitude that if a kid does something against it's parents wishes, it's a bad parent is just risible. ALL kids find the opportunities available to them to skirt the rules. Even when they're old enough to know what the rules are. And they can be pretty cunning.

A LOT of people knew nothing about it and the interface didn't tell. Nor did it offer a confirmation of when the 15 minutes had expired. Ideally, it should have expired instantly unless the user specifically selected a window, and should have offered a way to see if the window was still open and a button to close it immediately.

There is a such thing as an interface that defies understanding. This was such an interface and it seems deliberate.

More succinctly, an effective free market requires participants to be rational and informed. Product behaviors like keeping a purchase window up for 15 minutes without notifying the customer deliberately try to mislead and misinform the public. That's the sort of thing the FTC is there to crack down on.

I don't see any problem with a pop-up after a purchase asking if you wish to continue to make purchases for 15 min without having to re-authorize. But to silently make it the default behavior is pretty

The biggest problem with micropayments is that they are not micro. If we were talking 1 or 2 cents to buy an in-game upgrade then children could spend their pocket money on them. Instead we are talking about several Euros/Dollars just to get another turn today.

Or, people could start using their brain and actually learn how to use their devices that they feel that HAVE to have. As long as the option is there to ask every time, it's in the user's court. I'm tired of everyone being too dumb to even try.

Joshua Wright, an FTC commissioner who dissented in a recent settlement with Apple, says a 15-minute open purchase window produced "obvious and intuitive consumer benefits" and that the FTC "simply substituted its own judgment for a private firm's decision as to how to design a product to satisfy as many shareholdersas possible."

If a 15 minute open refund period produced "obvious and intuitive consumer benefits" just think about what an hour could do. You know, like enough to actually test out the app for REAL. Especially apps that are more complicated than flappy bird and, oh yeah, more expensive.

Mea Culpa: though I will acknowledge that a "free" app with in-app purchase, that works well enough to test it out before spending money, is indeed one way to get around the limited 15 minutes to test the app.

If a 15 minute open refund period produced "obvious and intuitive consumer benefits" just think about what an hour could do. You know, like enough to actually test out the app for REAL. Especially apps that are more complicated than flappy bird and, oh yeah, more expensive.

Mea Culpa: though I will acknowledge that a "free" app with in-app purchase, that works well enough to test it out before spending money, is indeed one way to get around the limited 15 minutes to test the app.

But of course those apps are not the problem. The problem the government (you know, the supposedly by the people FOR the people) is trying to prevent predatory sharks from bilking people of money through shady practices like kids games that make it very easy to just click click spend a shed load of money.

A 15 minute refund period would be delicious. It would completely destroy the IAP marketplace. I'd be able to again buy high quality games for $5-15 and not be faced with game designers who focus on nickel-and-dime ripping me off. They'd actually have to work on making the game fun enough for me to be willing to pay for the non-trial version. Wolfenstein 3D and later Doom did this well with shareware trial versions. Similarly a whole bunch of games from that era: Jill of the Jungle, Commander Keen, etc

"Disable In App Purchases" should be a checkbox in the settings for the App Market and it should simply render invisible any games that incorporate In App Purchases

It would also render invisible any games that use your suggested shareware model. There are two distinct kings of IAP: "entitlements", which are purchased once and stay with the user as long as the use continues to use the platform, and "consumables", whose purchase can be repeated. Purchases of paid apps are essentially an entitlement inside the App Store app, and registering shareware is the same as buying mission packs, which are entitlements. Most of the IAP ire comes from consumables like "smurfberries

Nope. It would enable games with a 'trail' shareware version, and a 'paid' full version. There are many games that are distributed this way in the App Store. In particular, one of the market leaders, Minecraft Pocket Edition, is distributed this way.

The 'entitlements' model for 'upgrading' are just an alternative path. With a 'block IAP' checkbox, it would cease to exist.

It would enable games with a 'trail' shareware version, and a 'paid' full version.

If the trial version and the full version are separate apps, then how would the player move saved progress from the trial version to the full version? Or would the player be forced to restart the campaign?

I thought iOS isolated apps from one another, not letting apps "set flags" in other apps. It's not like Android, which has more general forms of inter-application communication like the ContentProvider.

My phone shows that I have used ~1.95GB of cellular data since July 7th. You can be sure that I am not going to be paying anywhere near $1,950 for this month's phone bill. If you are paying $1 per MB, you have been conned.

What would it display for "price per hour" in the case of games that ship with one episode and use a one-time in-app purchase to "register" the game and unlock the entire rest of the campaign? Historical examples include Doom, which had "Knee-Deep in the Dead" without charge and two mission packs called "Ultimate Doom" and "Doom II".

... labeling all games with IAPs as rentals and displaying the average cost of being able to keep playing... per hour or something like that?

But most are not rentals. For example, "Candy Crush" with levels 1 to 35 is free. Candy Crush with levels 1 to 50 costs Â£0.69. Candy Crush with levels 1 to 64 costs Â£1.38. And so on. There's no rental. Once you paid it's yours. For Â£1.38 you get a game with 65 levels, which you can download on all your devices and play as long as you like.

Candy Crush is a massive pig of a game, though. One that is close to collapsing under the weight of the bullshit they've shoved in there. The spash screens, side-game spam and extra garbage that rumbles into your face while you're trying to... well... get to the screens to crush candy, are really annoying. Thank goodness it's such a well-cloned game, because there are many lightweight competitors where you can actually play the game. King, the publishers of Candy Crush Saga, are a Zynga wannabe. Let's

A lot of the games that have IAP are 'pay to win' games. One of the most popular games in the market from one of the successful developers is Hay Day by Supercell. It's essentially a 'play to win' game. My spouse plays it and has a lot of fun doing so but has never, ever, made an In App Purchase to do so. The leaderboards are completely meaningless and irrelevant to people who've never paid for 'gems' though, because the 'Top Players' are entitled rich children (one presumes) who've bought their way to

and often weren't bad value for the money. You got to play games on far more advanced hardware than you could afford at the time and the operators maintained a public space you could play others in.

DLC's & free to play are the same. You can do them right and wrong. I've generally heard good things about Warframe and League of Legends. On the other end of the spectrum you've got Dungeon Keeper and Candy Crush Saga. And right in the middle you've got stuff like Mechwarrior tactics.

You go to a theme-park with your children.If the kids want to have an ice-cream, they just go to the ice-cream stand, order and say the name of their parents (you), so they get the bill when you leave.

You go to a theme-park with your children.
If the kids want to have an ice-cream, they just go to the ice-cream stand, order and say the name of their parents (you), so they get the bill when you leave.

Who thinks this is not a brilliant idea?

Meanwhile the park employees are all atwitter about StripedCow's 300 children.

Meanwhile the park employees are all atwitter about StripedCow's 300 children.

But once management finds out about their tweets, watch them end up fired for spilling the beans, like Nicole Crowther in this BI article [businessinsider.com], in favor of people who can keep their mouth shut. Then watch management find people like twitter [slashdot.org], who can do the job of a dozen people [slashdot.org].

Meanwhile the park employees are all atwitter about StripedCow's 300 children.

But once management finds out about their tweets, watch them end up fired for spilling the beans, like Nicole Crowther in this BI article [businessinsider.com], in favor of people who can keep their mouth shut. Then watch management find people like twitter [slashdot.org], who can do the job of a dozen people [slashdot.org].

Consider that "atwitter" does not necessarily mean "tweeting", or whatever social that people use to destroy their lives.

My point was that StripedCow seems to think that kids telling an ice cream vendor that they are his kids, so they can buy their munchies at the park was a good idea. Then suddenly everyone becomes StripedCow's children. It's like in-app purchases gone wild.

I'm certain the park would issue bar-coded or electronic armbands to each child, so that the consumption could be tagged to a specific parent.

And hopefully medical restrictions, like Suzy who is diabetic, who really has a craving for ice-cream, of maybe some kids with religious food bans, or Bruce with the peanut allergy who wants to commit suicide by park vendor.

There are just so many things wrong with the idea. Perhaps the parent might make a sensible judgement and be around their children.

I thought of it another way. You go to the store and everything the kids touches goes on your credit card. Remember, most of what occurs in the apps has no real world equivalent. You can't go and return it, or even complain it was faulty or did not meet expectation. At least a theme park if there is bug in the ice cream you might get another one.

In any case,Apple is absolutely wrong here. If this were a convenience feature it would be easy to add in a setting like they do with so many other features.

Impose a maximum in-game purchase to the game's rating and impose a maximum spend per account per month. i.e. an E for everyone game may have a max spend of $5. If a user wants to override these settings then they can from the account settings. The power of the default mean the majority won't and thus people will be protected from nasty surprises. Oh and ban more than 1 in game currency that maps onto real world money and require them to show a dollar / euro / pound value against any purchase that uses it.

Aside from protecting users it deters games from being glorified skinner boxes with cow-clicker complexity and micropayments galore and encourages producers to start making actual games again.

Is this where we set the bar of government interference in our private lives?

A very simple solution would be the parents don't allow an irresponsible child to play a game with in-game purchasing. Hell, that might even institute a bit of self-restraint a growing child could use the rest of his life.

Is this where we set the bar of government interference in our private lives?

Commerce is not your "private life". It is the transfer of "property", something created by government fiat and enforced by government guns. And it in most cases is it the transfer of "property" to or from a corporation, an entity created by government fiat.

If it doesn't directly involve government issued land and resource deeds (the root of all physical property), copyright and patents and trademarks (the root of all so-called "intellectual property"), or corporate charters, and doesn't involve government-enforced contracts, then you can maybe complain about government interference in your "private life".

It's reasonable to download a kid's game, and to hand the phone to a kid to keep him or her amused. In doing this, one would normally assume that that was the extent of the transaction, and that the kid wouldn't be able to spend one's money while playing the game. Apple certainly didn't warn people of this, and apps weren't warning parents of in-app purchases. Instead, they did their best to get the kid to spend large amounts of money witho

Apple already has most of these restrictions and more.The ability to turn off in app purchasing and / or making purchases. The also have 'allowances' which once reached the user can't spend pass that unless they provide an additional form of payment. iDevices also allow you to turn OFF the 15 minute window and specify that a password is required for every purchase.

Parents really have NO right to complain if their children are racking up purchases on their iDevice because they have the ability to limit th

I'm sorry but parents DO have a right to complain. Apple / Google / Microsoft are facilitators of a system which not only encourages but profits from games charging money for in-app purchases. It means that the controls are begrudging implemented and usually flipped to off position by default. And it is not hard to find games aimed at young kids where the game encourages the player to purchase $50-100 bundles of coins, skins or whatever. They don't want to tip the applecart so to speak.

When companies take advantage of customer addiction tendencies, it's predatory, and causes long-term suffering, for short-term satisfaction.Since the companies can't regulate themselves, the government must do it for them.

Coke is without coke these days as well, and that is a good thing (coke causes the brain to become psychopathic over time).

Why is this phrased from the extreme viewpoint of one of the sides in the issue? The phrase "Why Do You Hate In-App Purchasing Freedom?" could be rewritten "Why Do You Hate Me Exercising My Freedom To Steal Your Kid's Cellphone By Trading It For a Cheap Toy He Wants?"

I'm sorry. The issue concerns In App Purchases that are engineered to allow gullible kids to rack up charges on their parent's phone.

So, how do they engineer forcing the parents to provide a credit card to the kids? My understanding is that no purchases can be made unless an account password is entered - that's a parental responsibility. They're not preying on gullible kids, they're taking advantage of stupid and irresponsible parents. Such stupidity should be painful.

Or parents who think that they can just let the kids do what they want now, to shut them up, and dispute the charges later with the credit card company. That way they don't "have to be the bad guy" with their kids either, by saying "no".

It's really screwed up, and I've seen it most in broken families.

My kids both have Android devices, and once in a while they'll get a gift card for a holiday, but by and large

My understanding is that no purchases can be made unless an account password is entered

That wasn't always the case, and also a 15 minute window for "convenience" is clearly a loophole waiting to happen.

If this isn't a scam, that window needs to pop up every single time the app is hitting the user up for money. I do not give my son my password, and I've already told him I don't pay for in-app purchases ever (because individually I hate the practice), so he either needs to be able to play without, or find ano

"Why do you hate freedom" is a phrase which, at least on Slashdot, is used only ironically. It means "this is the kind of thing which is pushed on the basis that everyone who hates it hates freedom". It doesn't mean that the person writing those words himself makes that claim.

What the fuck are these so-called "benefits" of a "15 minute open purchase window" that are so obvious and intuitive?

Forget about "the children". Who is so badly damaged as a person that they feel that it's currently just too hard to buy stuff online?

Let's see... I want to spend Â£10 on some music. So I go to the iTunes Store. Find a song that I like, click on buy, and I'm asked to enter the password for my AppleId. The song downloads. I go on looking for other stuff to buy. Find another song, click on "Buy", and I have to type in my password again. Bugger. I go on looking for more songs. Click on "Buy", and again I have to type in my password. Fuck that.

A fifteen minute purchasing window is not something that is obvious to most people, but it's reasonable for adults and their own accounts, since it's just a convenience feature, and... well, they're adults. Hell, it can be even on by default. If you can't control your own purchases, no rules the government sets will make much of a difference as you destroy your own life.

Where these companies crossed the line is by not requiring an authorization password each and every time a purchase is made from a depend

Thinking about this further, if I had a choice, I think I'd like to see separate options to allow or disallow that fifteen minute convenience window from crossing over to in-app purchases. For myself, I'm fine with trusting myself or the app store with that convenience. But it seems like giving an app blanket permission to charge my account whatever it wants for a limited time is a really, really bad idea. Call me paranoid, but I'd like tight security when it comes to what apps can take from my wallet *a

It takes you 3 seconds to type a secure password on a tablet? You are pretty fast. 10-12 characters, many of which require a mode change... 18 taps or so. It takes me 15 seconds to type what it'd take 2 on a real keyboard.

At the same time, I would much rather type the password every time in the tablet that my son uses than have to police the darned tablet for 15 minutes after I type my password.

Companies are probably breaking all kinds of laws when they sell things to an 11 year old without parental consent. So who needs the protection? How about dad discovering that his 16 year old has racked up $1,500 in one month on cam girls?
One answer to many problems is a strong, national ID card. A simple computer check could contact the card holder anywhere at any time in such a way a wayward child would be detected right away.

The problem is not the 15-year-old spending $1500/month on cam girls. The solution to that one is simple: don't let the 15-year-old use your credit card without supervision. Ideally, you'd keep some sort of tabs on his internet use, but teens are very adept at concealing behavior their parents would disapprove of. Moreover, a 15-year-old will know what he's doing and that he's spending money.

Moreover, a national ID card would be pretty well useless in this. The child in either case is using the pare

In the 21st century, people are screaming for the government to regulate their lives in order to protect them, to provide "security", and to "make people feel safe". It's the fag end of the smoldering socialist experiment.

It has nothing to do with socialism. There are a lot of self-described conservatives in favor of restrictive and intrusive regulation in the name of security.

Socialism is democratic worker control of the means of production, you troglodyte. That's all it is. There is less security under socialism than capitalism, because nobody is allowed to rely on invested capital. This minor controversy has absolutely nothing to do with socialism.

All that's going on here is a few rich guys whining that they want ways of taking money from people using a technological loophole - the ease with which a child can use mom's credit card - rather than directly as a result of a contract formed between two adults providing informed consent. If anything, the capitalist position would run contrary to TechFreedom's argument because capitalism strives for informed, rational agents, necessarily treating children as a special case. To be clear, children usually cannot form contracts, but nobody owns children, therefore they cannot be entirely responsible for their actions.This reflects their status as developing humans.

So get off your high horse and stop worrying that the sky is falling. Every dull member of every new generation speaks like the "golden days" have come to an end because xyz minor thing that they don't really understand means the end of the world.

What do you mean by "brand of socialist"? Are you trying to re-define "socialist" as a pejorative rather than a label for a specific system? "Anything which doesn't agree with a particular sort of free market system," perhaps? I understand that "socialist" is sometimes used in the United States like "terrorist" - the latter is a person who inflicts terror on civilians to achieve a political aim, but is commonly re-"branded" to mean "anyone I'm fighting against".

Social democracy is a nod in the direction of socialism, and it may have institutions which operate partly according to socialist principles, but it is certainly not socialism. It's not just that the majority of work is conducted through private enterprise, but that state ownership of the commanding heights of the economy tends to be selective, and their organisation tends not to focus on democratic control: a government may merely have a controlling share in a business run as any other capitalist business.

You clearly don't understand the meaning of EITHER socialism or communism. Communism predates Karl Marx. And Stalinism isn't even Marx-Lenninism. (Note the hyphenated designation, as that which Lenin preached and practiced wasn't what Marx preached.) Also neither is Maoism, which also is only one variety of communism. (Stalinism isn't ANY kind of communism. It's just standard totalitarian dictatorship with an unusually brutal and despotic dictator. Only Idi Amin could claim to practice the same kind of government, though Pot Pol had certain similarities.)

Calling yourself something doesn't mean that the label rightfully applies to you. The North Korean government calls itself a "People's Republic", but it doesn't match the conventional meaning of Republic. (Do note, however, that Republics are normally controlled by an Oligarchy of some sort. It's not the "feel good" term that USians are generally taught it is. Not if you really understand what it means and how it operates. And the constitution guarantees that the states will have a Republican [Things of the Public] form of government, not a Demmocratic [i.e., power derives from the people] kind of government. And in both these cases I grossly simplified the meanings of the terms. In fact I'd need to research a bit to determine precisely what each meant, though basically in a Republic power derives from ownership of things, and in a Democracy power derives from being a "person", for some meaning of person. [E.g., slaves were originally considered to be only 2/3 of a person in the US.] Please note that this doesn't mean that the power belongs to the people, but rather that the government allocates power on the basis of people.)

Sorry, but you are confusing existing systems which are called Socialist with Socialism. It's not an unreasonable argument, but Socialism isn't necessarily a government. Local laws permitting individual factories can be Socialist. And there is no guarantee that such a facotry would provide those benefits.

OTOH, both countries and factories can fail whether they are Socialist or Capitalist. There's no inherent guarantee that one is more likely to fail than the other. The fact that there are few successfu

In classic Fascist states, the government was totalitarian, but tried to keep industrialists and businesses happy. The economic system remained capitalist. In Nazi Germany, there was one labor union, and it was rendered pretty ineffective. Theoretically, the government could order the businesses to do anything, but as a matter of practice they tried to stay hands-off. (The US War Production Board controlled businesses in WWII more tightly than the typical Fascist state.) Money is important.

They don't. "In-App purchases" are charged to your Apple Store/ Google Play/Amazon/whatever account. There are APIs to enable this.

You usually have to give your password for this to happen... but there are various gotchas such as a 15-minute window during which you don't have to re-enter your password and other design flaws e.g. asking for your password even for free apps.